Almas Recording Studio rents studio time to musicians in 2-hour blocks. Each session includes the use of the studio facilities, a digital recording of the performance, and a professional music producer/mixer. Anticipated annual volume is 1,290 sessions. The company has invested $2,335,000 in the studio and expects a return on investment (ROI) of 19%. Budgeted costs for the coming year are as follows.

Per Session Total Direct materials (CDs, etc.) $ 20.11 Direct labor $397.00 Variable overhead $ 55.00 Fixed overhead $1,229,370 Variable selling and administrative expenses $ 39.00 Fixed selling and administrative expenses $650,160

Instructions:

(a) Determine the total cost per session

(B) Determine the desired ROI per session

(c) Calculate the mark-up percentage on the total cost per person.

(d) Calculate the target price per session.